Despite the many statements and various discussions about the possibility that the Palestinian Authority would dissolve itself, the real chance of this happening is almost nil. What is a serious possibility, however, is that the Palestinian Authority would collapse--not as a desired or planned event, but as the result of difficult economic and political obstacles facing the Palestinian people and their leadership.

There are four factors that suggest the Palestinian Authority is in danger of collapsing. To stave off this grave outcome, these factors must be confronted in a serious and responsible way by the three main involved players: Israel, the international community, and the Palestinian Authority itself.

The first factor is the economy. The Palestinian Authority has, over the last two years but especially this year, faced a growing financial crisis that is affecting its ability to fulfill its basic obligations to the public. This problem has become so serious, for example, that suppliers of medical equipment and other medical goods have stopped delivering to the government health sector due to the accumulation of debt owed them by the Palestinian Authority. A similar accumulation of debt is stalling other sectors of public development, including projects for roads, water and sewage development and the construction of public buildings.

As cited in the recent reports by the World Bank and International Monetary Fund, this situation is resulting from a decline in donor funding and a simultaneous increase in Israeli restrictions. If the crisis continues, then the IMF predicts that the next falling domino in the Palestinian Authority's ability to function will be the allocation of salaries to its civilian and security personnel. A prolonged financial and economic emergency of this type could easily contribute to the collapse of the Palestinian Authority itself.

The second factor weakening the Palestinian Authority is Israeli practices and restrictions, particularly in East Jerusalem and Area C (areas under Israeli control according to interim agreements with Israel). Area C constitutes two-thirds of the West Bank and Israel is increasingly imposing restrictions there that make life more difficult for Palestinians, while at the same time granting generous incentives to Israeli companies and citizens that seek to develop there or in East Jerusalem. The difficulties for Palestinians include preventing development that is vital for day-to-day life (access to schools or electricity, for example), as well as regular attacks on Palestinian property by settlers. The United Nations Office for the Coordination of Humanitarian Affairs recently highlighted the problem of settler attacks on Palestinian sources of water.

The third factor in this equation is the ongoing absence of a political horizon that would transform the Palestinian Authority into an independent state. The Palestinian people and their leadership appear less and less willing to allow this situation to continue--and alongside it, Israel's occupation. The Palestinian Authority was intended to exist for five years before being transformed into a state governing the lands occupied by Israel in 1967, including East Jerusalem. Israel seems to be interested only in maintaining the status quo, i.e., coexistence between the Palestinian Authority and an endless military occupation.

Finally, Palestinian internal political divisions and their consequences, mainly the resulting delay in holding elections that would grant the Palestinian Authority needed legitimacy, are having a corroding effect. The development of two separate Palestinian political systems and Hamas' continued control over the Gaza Strip, as well as the absence of a functioning parliament, are all leading to an absence in official accountability. Without needed accountability and legitimacy, the Palestinian government is in a difficult situation. The remaining legitimacy of the Palestinian Authority is linked to the personality of President Mahmoud Abbas, who promulgates legislation instead of the Palestinian parliament. This, of course, is an arrangement that cannot last forever.

Ghassan Khatib is coeditor of the bitterlemons family of internet publications and director of the Government Media Center. This article represents his personal views.

AN ISRAELI VIEWIt could happen

Yossi Alpher

The Palestinian Authority could conceivably disappear in a variety of ways. It could collapse due to financial insolvency, as PA Prime Minister Salam Fayyad has recently warned. It could be unilaterally dissolved by writ of PA President Mahmoud Abbas--as he too has warned--if Israeli Prime Minister Binyamin Netanyahu rejects his conditions for renewing negotiations. Or it could somehow simply dissipate in tandem with the removal or withdrawal from the scene of the current West Bank leadership.

Two primary actors that are not candidates for dismantling the PA are Israel and the United States. True, Israel knowingly endangers the PA when it withholds monthly tax and excise transfers--as it did several months ago and as several Israeli government ministers are threatening once again. But most Israeli officials understand they need the PA nearly as much as Palestinians do. In fact, Israel's financial punishment of the PA, along with financial penalties imposed by the US Congress, stem mainly from a tendency to confuse it with the Palestine Liberation Organization, Israel's statutory negotiating partner and frequent antagonist on the international scene. Perversely, that confusion is a compliment to the success and viability of the PA and a reflection of the concomitant weakness of the PLO and its primary member group, Fateh.

Nevertheless, and despite that seeming viability, let's suppose the PA ceases to function, for whatever reason. What would this mean for Israel, the Arab world and the international community?

The current Likud-led Israeli government would do everything possible to avoid assuming responsibility for administering the West Bank, lest it be faulted for destroying the peace process that created the PA and which the Likud is at least nominally pledged to maintain. Nor would it wish to resume the financial and security burden of running West Bank Palestinian affairs, as in the pre-Oslo era.

Ideas for maintaining the Israeli government's "distance" from West Bank responsibility would presumably run from calling for international or perhaps Jordanian administration to trying to organize a Palestinian puppet government. It's hard to imagine that any of these ideas would have traction. The resultant political, economic and security vacuum would quickly invite the intervention of nearly everyone else.

Hamas, recognizing the implications of PLO failure to maintain the PA, would seek to gain adherents for its leadership on the West Bank and to sabotage attempts to maintain stability. (On the other hand, it would have to explain to Gazans why financial transfers from the West Bank-based PA had ceased, thereby exacerbating Gaza's economic situation.) Extremist settlers might view the situation as an invitation for a land-grab. Either or both of these developments could oblige the Israel Defense Forces to expand their reach back into all of Area A: Palestinian cities and towns. The Israeli peace camp would justifiably trumpet the government's failure to prevent the PA's collapse and would seek new Israeli elections or heightened international intervention.

Calls would emerge from the Israeli far right and post-Zionist far left and from Palestinians who have lost hope for a two-state solution for Israel to annex the territory. The Palestinians and the post-Zionists would demand full citizenship rights for West Bank Palestinians, thereby jeopardizing Israel's claim to be a Jewish state. The far right would insist on some sort of distinction between Palestinian "personal rights" and Jewish "citizenship rights"--meaning, in effect, apartheid.

Meanwhile, an increasingly Islamist Arab world would find plenty in this situation to accuse Israel of. So would the US and Europe, where voices would be heard suggesting that the emerging crisis offered an opportunity to adopt more forceful policies in favor of two states and against the settlements.

Some who favor a two-state solution might claim to see advantages in this direction of developments insofar as it would force Israel's right-wing settler government to confront reality, recognize the negative consequences of its current policies and adopt more moderate ones. In reality, due to Israeli government and US indecision, Palestinian weakness, and pressures from all other camps, the outcome would probably be closer to chaos than to rationality. The cause of both Israeli Jewish nationalism and Palestinian nationalism, both of which ultimately require a two-state solution, might suffer grievous harm. The vast majority of both peoples would lose out.

Yossi Alpher is coeditor of the bitterlemons.net family of internet publications. He is former director of the Jaffee Center for Strategic Studies at Tel Aviv University.

A PALESTINIAN VIEWTotal change

an interview with Samir Abdullah

bitterlemons: What would trigger the collapse of the Palestinian Authority?

Abdullah: The Palestinian Authority takes its legitimacy from two sources. The first is how far it can advance the political project and the search for independence. The second is to what extent it can provide good-quality services, manage a good economy, provide jobs for the unemployed, provide social security to the elderly and the handicapped, and provide a good climate for investment and so on.

These are the two pillars from which the Palestinian Authority gets legitimacy. It can't survive over the long term by advancing only one of them. [The Palestinian Authority] is not sustainable even if it has the best economic performance in the world. This would last for a short term, but in the end people want freedom. They want their political aspirations to be realized. Also, partial political advancements are not sustainable alone.

So, to view where we are currently: sometimes these two pillars of legitimacy work against each other. [This happens] whenever we have an Israeli government that does not have an interest in the peace process, that does whatever possible to poison the political atmosphere, that closes nearly all avenues for the advancement of the peace process. The [Palestine Liberation Organization] and the Palestinian Authority must show the public that they are working on democracy and freedom and independence, and so the Israeli government punishes the Palestinian Authority [for this] by making a difficult environment for investment, cutting resources to the Palestinian Authority, and making the ability of the Palestinian Authority to advance the economy difficult.

If the Israeli government maintains this track for many years, denying the Palestinians any progress in either the political path or the social and economic path, it could lead to the fall of the Palestinian Authority.

bitterlemons: Why is Israel toying with this equation? It seems like it would want the Palestinian Authority to survive to avoid adopting the burdens of providing Palestinians with services?

Abdullah: Since the Palestinian Authority was born in 1994, [successive] Israeli governments have played this game, trying to strike a balance between keeping the Palestinian Authority able to survive but not [allowing it to] flourish.

Now, [however], we are seeing new politicians who don't care, who feel that it is better not to have the Palestinian Authority. They see the Palestinian Authority as an obstacle in their aspirations to take over the whole of the West Bank and kick Palestinians out and commit all kinds of crimes. These politicians are very strong [in the government] and [Israeli Prime Minister Binyamin] Netanyahu is almost a hostage to their policies. It is creating embarrassment for him but he can do nothing to change the situation.

bitterlemons: Then what do you think is the likelihood of the collapse of the Palestinian Authority?

Abdullah: To be frank with you, I can't believe that this will happen. It is in no one's interest. If it happens, it will be as the result of a regional war or maybe in advance of a regional war. The government in Israel is capable of committing [just about anything]. If [Israeli leaders] see that they can succeed unpunished in a regional war, they will [go ahead] for the sake of ending the peace process and maybe also transferring Palestinians outside [of historic Palestine]. This is very unlikely, but could happen with the volatile situation in the area.

bitterlemons: Can you speak some about the implications of a collapse of the Palestinian Authority?

Abdullah: It could mean the collapse of many things we have seen develop: the banking sector and financial sector, the stock exchange. These things need proper regulation and will not be able to survive. But other things, people will manage, such as import and export, and the normal economic cycle will continue. Services will be run through creative thinking by Palestinian communities.

Samir Abdullah is director of the Palestine Economic Policy Research institute (MAS).

AN ISRAELI VIEWNew political opportunities?

Amnon Lord

The disintegration of the Palestinian Authority--ultimately, an act by the Palestinian leadership to dismantle the PA--is certainly not in the interest of Israel, for quite a few reasons. It is also not in the interest of the Palestinian Authority and the Palestinian leadership, whether Fateh or Hamas. Here are some thoughts as to the diverse directions such a development might take.

For Israel, the possibility of the PA closing down and throwing the keys into the Dead Sea is a nightmare. Not so much because of the international consequences, but rather due to the reality on the ground in terms of Israel's relationship with the Palestinian population. The prospect of returning to the old regime of military and civil government over the entire population of the West Bank is a responsibility Israel would be hard put to cope with.

Beyond the bureaucratic hell of rebuilding government tools to run life in the former PA, there's the full economic burden that would fall on Israel's shoulders alone, given the presumed dissolution of the old economic accords dating from the time of Oslo. This also means cancelling the transfer of huge sums of money that donor states regularly contribute to the PA's coffers. The outcome would be a mess.

This could also spell a strange situation in which the United States becomes the occupying power by proxy. It might be forced to share Israel's financial burden of renewed military occupation while Israeli soldiers, Israeli policemen and Palestinian security personnel--on leave? volunteering after being fired?-- absorb the friction and deal with one another. The media would have a field day.

On the other hand, new political opportunities would arise, should Israel wish to take the initiative. First of all, from the administrative point of view the easiest solution to Israel's new political mess would be complete incorporation of the West Bank Palestinian population into the state of Israel. Since politicians always look for the easiest way out, a right-wing government might slide in that direction. This would of course involve a gradual process of granting full citizenship to West Bank (but not Gaza Strip) Palestinians.

A decision to move in that direction would draw new political reactions, both internationally and at the local Palestinian level. A new Palestinian leadership would inevitably emerge following retirement of the old guard of Mahmoud Abbas and others. This would happen spontaneously, because over the years Palestinians have developed an active civil and political society and it's not likely that they would simply pause and wait for an Israeli bureaucrat from the Ministry of the Interior to knock on the door and present the endless paperwork required to get Israeli citizenship. Since only the PA would disappear, not the Palestinian people, the latter would organize and demand that the incorporation process take place through negotiations with a legitimate leadership. There could be an agreement to hold elections.

Here the Fateh movement would encounter a problem. If things go the way described above, there would almost certainly be a soft political takeover of the West Bank by Hamas. This is hardly what Israel and the current leadership of the PA would want. By dismantling the PA, its leadership would lose a power base. However weak and dependent it may be, that power base is still a mechanism for launching political warfare and propaganda, managing international relations, and disbursing a lot of personal benefits.

Legal claims against Israel would take a different turn. In my view, they would benefit many Palestinian individuals but not the Palestinian national interest. For example, the Israeli legal system would have to entertain land claims by Palestinians on a regular basis rather than--as at present--discussing a few dramatic legal disputes. The Israeli legal system would be the first to grant de facto citizenship to every person from the occupied territories.

Dissolution of the PA would reopen the way for Jordan to play a role. This time around there could be an Israeli demand, shared by the Palestinians themselves, that the Hashemite regime go along with the democratization process in the region and become more Palestinian to reflect the identity of its majority population. Thereafter, Jordanians together with Palestinians might move into the role of negotiating with Israel.